Money laundering undermines the integrity of the financial system and threatens national security. Elaborate: How effective has Prevention of Money Laundering Act, 2002 (PMLA) been in directing the problem of money laundering in the country?

Money laundering is the activity of converting Black money in a way to show that the original source of it is legitimate source. Support of money laundering: I. Integrity of financial system 1. Reflects poor financial policing 2. Initiates black money → more parallel economy - Organized crime - United Revenue II. National security: 1. Thrives organized crimes, illegal activities eg. Drug Trafficking

2. More vulnerable to security challenges like terrorism through organized crime linkages Effectiveness of PMLA, 2002: Enforcement through ED, for preventing money laundering, attachment, seizure of properties 1. Lack of Raids core for political reasons eg. on leader of opposition 2. High corruption → heightened in poor conviction but high voice 3. Failed to check black money - Paul committee → black money is (6-12% GDP) can be 4. Empowerment / provisions / penalties are strong but enforcement is weak

To curb the menace of money laundering, structured reforms beyond legal reforms due needed.

— CHEJARLA ASWANI KUMAR · AIR 256